House finance chair blasts ‘Soviet-style’ regulatory regime

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The chairman of the House Financial Services Committee pushed for the replacement of the controversial Dodd-Frank Act Tuesday at the markup of Republicans’ alternative legislation.

Chairman Jeb Hensarling (R-Texas) as long been a critic of the Dodd-Frank Act, which he and other House Republicans say places an undue regulatory burden on business. House finance committee Republicans have pushed their own alternative, the Financial CHOICE Act, as a sensible replacement for Dodd-Frank.

“We were told (Dodd-Frank) would lift our economy, but instead we are stuck in the slowest, weakest, most tepid recovery in the history of the republic,” Hensarling said Tuesday. “The economy does not work for working people. They have seen their paychecks stagnate. They have seen their savings decimated. We have seen millions who remain unemployed and underemployed and an economy working at roughly half its potential. There is a better way.”

Hensarling said that Dodd-Frank was to blame for increasing financial hardships for consumers, including the reduction of free checking accounts and the increase in auto loan costs and credit card rates.

“We were told that Dodd-Frank would make our economy more stable, yet the big banks are bigger,” he said. “We have seen historic levels of bond market illiquidity and volatility, a major funder of our job engine in America. We were told that it would end ‘too big to fail,’ yet instead we know that Dodd-Frank codified ‘too big to fail’ and created the orderly liquidation authority so that taxpayers would be forced to bail it out.”

According to Hensarling, the Financial CHOICE Act would put an end to bailouts and replace taxpayer funds with “Loss-absorbing private capital.” He said the act would also rein in the Consumer Financial Protection Bureau – which Republicans have long criticized as an unaccountable rogue agency.

“(The Financial CHOICE Act) creates true consumer protections so that our consumer agency will enforce the law and not actually make it up,” he said. “It will hold Washington accountable by removing a Soviet-style command-and-control economy.”
Hensarling said that under the current regime, regulators have too much power.

“As Madison warned us in Federalist 47, the combination of all powers – judicial, legislative and executive – in one branch is the very definition of tyranny,” he said.